Seanad Éireann - Volume 154 - 31 March, 1998

Adjournment Matter. - Cavan-Monaghan Electricity Generating Plant.

Ms Leonard: I thank the Cathaoirleach for giving me the opportunity to raise this matter. I welcome the Minister of State and I thank him for coming before the House to deal with this matter of paramount importance to the people of the Cavan-Monaghan area.

The poultry and mushroom industries are the two most important for people living in County Monaghan. Poultry and mushroom production account for 47 per cent and 12 per cent, respectively, of the county's gross agricultural output. The figures for national gross agricultural output are 4 per cent and 2 per cent, respectively. There are substantial export markets for both products, with a projected increase of 2.5 per cent and 5 per cent, respectively, in the next decade. The production and processing areas of these industries also create substantial employment.

Both industries were developed in County Monaghan by small individual concerns and they have slowly and steadily built on their success. However, as everyone is aware, success often has its downside. In this instance, the disposal of poultry litter and mushroom waste is causing increasing problems for the county. At present, we face great difficulty because land-spreading of these by-products is being seriously restricted due [1340] to the high levels of phosphate and nitrogen discovered in the soil. These high levels are also causing problems in respect of the county's waterways. In 1993, Interreg funded a study which showed that the county's water catchments contain very high levels of contamination and are the most polluted in the country.

It seems the only solution to this problem is to follow the British example where waste is burned to generate electricity. From the most recent information I received from the Department, it appears the Government's energy strategy is designed to increase the share of renewable energy generated by independent producers to 6 per cent by the year 2000.

In 1994, when the first alternative energy competition took place, a project was initiated in County Monaghan to establish a plant to generate electricity from waste material. At that stage, 75 megawatts were available, of which 15 megawatts were to be dedicated to electricity generated from biomass or waste. A company called Monopower was established and a site was acquired for the proposed plant. In addition, a group of people involved in setting up the plant travelled to Scunthorpe in England to view a similar plant, which is situated in the middle of a residential area. At the time in question, successful negotiations took place with the Department of Finance to have the corporation tax reduced to 10 per cent to bring it in line with the rate applying to manufacturing companies. Everything appeared to be in place to bring the plant to County Monaghan but in the spring of 1995, following a change in Government, the competition was redirected towards wind and hydro energy. Needless to say, there was great disappointment in County Monaghan.

A second competition was held in 1996 which resulted in a 30 megawatt licence for north County Dublin being granted to a consortium comprising a US company and the ESB, with the provision that its operation should be up and running by 1999. My most recent inquiries to the Department revealed that the project has not yet passed the planning permission stage.

I raise this issue because a third alternative energy competition is expected to be announced shortly. I understand that 19 megawatts will be dedicated to wind projects, three megawatts to hydro energy and seven megawatts for biomass and waste. There is a need to dedicate at least 15 megawatts from that project to generation of electricity from waste because the projected provision of seven megawatts would not be adequate to cater for the waste material produced in my constituency alone.

This matter affects the entire Border region, particularly County Monaghan with its poultry and mushroom industries. It will also affect County Cavan which has a large number of pig producers. In that context, I wish to highlight the fact that a plant in Denmark burns dried pig slurry to generate electricity. The provision of an electricity generating plant in the area would be [1341] a bonus to both counties and the Border region, North and South, because many factories involved in these industries are situated on both sides of the Border.

It is impossible to explain the seriousness of the situation obtaining in County Monaghan at present. The problem has become so grave that restrictions will be placed on further expansion of the poultry and mushroom industries. Recently, fears arose at county council level that planning permission to build new mushroom and poultry houses would be refused on the grounds that there was no suitable site at which people could dispose of waste.

One of the comparisons made is the cost of such a plant. I am aware this is an expensive proposal. It cannot be compared to wind or hydro energy because it costs more to dispose of the waste. For many years Monaghan has been known as an entrepreneurial county and we have depended on individuals who have put their necks on the line by starting industries — of which the mushroom industry is an example — which would not have been popular in the early 1980s. They have done this on their own, although they received grants. They took many risks and have done a great deal for our area.

Most of our farmers are small farmers and many of them have mushroom and poultry units on their farms to earn a living from them. The situation is so serious that we are at risk of losing our small farmers. I cannot stress highly enough the importance of such a project to our area. I am fed up of hearing about the Celtic tiger because we, particularly the small farmers in the Border regions, have not seen the face of the Celtic tiger. If something is not done in the near future, it will sound the death knell for our agri-business, particularly mushroom and poultry production.

I urge the Minister to give serious consideration to Monaghan in future competitions. We are an entrepreneurial county and although the wheels were set in motion for this proposal, it was unfortunately taken from under our noses.

Minister of State at the Department of Public Enterprise (Mr. Jacob): I thank Senator Leonard for raising this urgent matter. I know it is close to her heart and in the interest of her constituency and she has already raised the matter with me outside this House. I welcome the opportunity to clarify for the House the role of my Department in the development of alternative energy sources and the related but separate policy on waste management.

The Action Programme for the Millennium recognises as key issues the implementation of waste management policies, the control of farmyard pollution and the use of alternative energies. My Department is responsible for identifying and supporting the development of alternative energy sources. Significant steps have been taken to increase the use of renewable energy, including biomass-waste, in the electricity production process. In 1995, my Department announced the [1342] results of its first alternative energy requirement competition, AER I, which offered contracts for a total of 111 megawatts of additional electricity generation capacity from alternative sources. Twelve megawatts of that total were for landfill gas electricity stations.

As a follow on, in December 1995 a second competition, AER II, was launched to secure an electricity generating station of between 10 megawatts and 30 megawatts fuelled by either biomass or waste, or a combination of both. The winning AER II bid was for the construction and operation of a 30 megawatt waste to energy facility in north County Dublin.

In early 1997, my Department announced the details of the AER III competition. This competition seeks to secure an additional 100 megawatts of electricity generation capacity from renewable energy sources and includes a sub-target of 7 megawatts from biomass-waste.

This competition is being conducted by ETSU, an independent agency retained by my Department. The results of that competition will be announced in the coming weeks, probably this side of Easter. The type of project mentioned in the motion would constitute a qualifying project under that scheme but at this stage I cannot comment one way or another on the likely winners. Indeed, neither I nor my Department are privy to the detail of bids in the competition.

The primary purpose of the AER competitions is to support those projects, identified in a competitive bid process, as the most economically efficient alternatives to conventional generating capacity and the adverse environmental impact of such technologies. It is not open to me to give preferential treatment to any project under the AER programme. On the contrary, any such action could be immediately challenged under competition law.

In addition to the AER competitions administered under the aegis of my Department, the European Commission administers an EU THERMIE programme. The programme can provide up to 40 per cent of the energy technology costs of projects, including biomass-waste projects. THERMIE has been the catalyst for considerable growth, enterprise and innovation in the Irish energy sector and for this reason all Irish THERMIE supported renewable energy projects now qualify for an ESB power purchase agreement of up to 15 years. The EU Commission launched the last call for proposals under the current THERMIE Programme on 17 September last. I have no way of knowing the likely winners but the opportunity to submit a qualifying project presented itself.

For all these reasons I have to inform the House that the objective of this motion, justified solely on environmental grounds and seeking to address what is first and foremost an agriculture issue, is not compatible with the established principles for identifying successful alternative energy projects. It would most likely fall foul of the competition rules or the rules on State aid. Furthermore, [1343] outside of the AER process, I simply do not have the funds at my disposal for such a project.

I opened this contribution by emphasising the separate key issues of the use of alternative energies, waste management policies and the control of farmyard pollution. The fact that preferential treatment cannot be given to the proposal under alternative energy competitions does not foreclose [1344] on the opportunity to bring forward to the appropriate authorities proposals which would deliver an acceptable solution under the latter categories. However, any such decisions are outside my remit. All I can simply advise at this juncture, in relation to my area of responsibility, is to await the outcome of the AER III competition.

The Seanad adjourned at 8.30 p.m. until 10.30 a.m. on Wednesday, 1 April 1998.